Richaroo

Hi

I am about to embark on the visa process - and boy am I confused/concerned.

I am mid 40's, looking to bring the family to the US for a better lifestyle and will need to rely on the eb-5 visa to get us all in and allow us to stay.

Fortunately I have the required funds etc to stump up the 500k (maybe 1mm) required and can clearly show where the funds have come from (employment/tax statements etc)

One of my big concerns however is that the general opinion of the forum seems to be, (and pls correct me if I am wrong) that while you can get your visa going down the eb-5 route, the chance of recovering your investment is poor. I.e. you are "buying" a visa.
Personally, this does not correlate with an "investment", and I would like to find another way around this.

To this end, I have been looking at buying 1 or more franchises (investing the required funds for the eb-5 and creating the required jobs) to achieve my visa and set up a business that will "hopefully" return well and appreciate.

Has anyone else done this or is looking to do this?

Any help would be greatly appreciated.

Richard

ian-mstm

You're not actually "buying" the visa so to speak... you're buying the "green card" - which is proof of your status as a US permanent resident.


The investment is always at risk, but the general consensus is that you are buying the opportunity to live as permanent residents in the US... which, after 5 years, can become citizenship. It's less of an investment and more of a trade, if you see what I mean.

That said, it's certainly possible to recoup the investment (or, at least, minimize the loss)... but I suggest the main impetus for most people is the opportunity to become PRs rather than the opportunity to recoup.

Unfortunately, I don't know a whole lot about the EB-5, so I'll let others help guide you.

Ian

notshipman

Choose the franchise carefully e.g go for something tried and tested like dunkin doughnuts rather than something wild and wacky

cranston

Hi Richard.

I went the regional center route but I have met people who have done what you are considering. The rules seem to me to be simple.

If it is considered an area of high unemployment you need to invest (just) $500k. The formula is something like 150% of the average unemployment. You will need to carefully check with your lawyer and USCIS that your area will be accepted. Otherwise you will need to invest $1 million but with that amount you will be able to open a business anywhere.

You will need to create 10 new jobs. Assuming they give you the initial green card. You will be audited by USCIS at the end of 2 years. You will need to prove that your investment funds had remained in the business and that the jobs have actually been created.

If you are serious then you should consider investing within the Texas triangle (Dallas, Austin, Houston and San Antonio). IMO, this is the #1 place for business in the US (and where I live), low regulation, low taxes, friendly employment laws and booming economy.

Get yourself a good EB5 lawyer and good luck to you.

USCIS link explaining EB5 visa.

sir_eccles

The only thing I know about eb5 is that the investment MUST be at risk and no scheme is allowed to guarantee any sort of return.

Richaroo

Thanks all for the responses. Cranston especially - I will definitely get a good (hopefully) lawyer and if I do go down the direct investment (franchise) route then I think it is even more important to get someone who can fully guide me through the process.

Will look into Texas as a location although at the moment I am pretty much sold on North Carolina - and if I am going to be actively managing the business (a requirement I think) then will need to live close by.

I also agree - a large well known franchise (although more expensive) will be a better (lower risk) strategy I think.

Any other thoughts are most welcome and appreciated.
I would love to hear from someone who has gone down this franchise route.

Richard

S Folinsky

Consultation with competent counsel is in order. Do note that many immigration lawyers like to avoid EB-5 because it is one area of immigration law that is excluded from E&O coverage.

I see that no one has mentioned the provisions for purchasing a distressed business. [A firm I used to work in had a client who purchased an on-going business for E-2 classification. He ran it so badly, it became "distressed" and was used for the EB-5 petition -- successfully. The adjudicating officer and I were in agreement that it was a crazy case, but it WAS within the letter of the regulations -- we shared a good laugh].

cranston

Active participation by the regional center investor in the EB5 business is not a requirement for the visa. None of us Regional Center Investors have any role in the day-to-day of the projects.

S Folinsky

Your post can be a little misleading and I am sure it is not intentional. It would have been more accurate to say that regional center investors are exempt from the requirement of management of the investment.

Also, I forgot to mention that use of an investment to expand an existing business may qualify for EB-5.

To repeat, legal consultation is in order.

Hotscot

Also be aware that depending on industry and location many businesses have access to cheap labor that you may not feel comfortable with, especially if you're keeping your nose clean.
Therefore competition from established franchises can be extremely difficult to overcome. Especially if fast food or service related.

Also check this
http://www.statisticbrain.com/startu...e-by-industry/

You may like to consider purchasing an already successful business, that way you'd be able to gauge the operations in advance.

And the whole better life thing? No guarantees and if you fail you could be far worse off than you've ever been in your life. Certainly, although I have a very good life here, I generally don't find the U.S. superior to UK/Europe in quality of life.

Make sure you have a solid business plan and a solid exit strategy if it goes balls up.
Extensive research, hard numbers, no wishful thinking. It's dog eat dog here.

For small business owners long hours, little vacation, lots of stress, the economy is poor.

Do you want that at this stage in your life? Or if you have the funds you could consider visiting the parts of the U.S. you'd think you'd enjoy every year.

I know this may seem cynical but it's realistic.

I have also started my own business, as an Independent Technical Sales Rep, representing European manufacturers with no representation here.

dm2b

Hotscot:

Richaroo: listen to Scot, he knows what he is talking about. I had already decided against an individual EB5 for a number of reasons, and in his post I just learned a couple of new ones... I've decided on the RC EB5 route and I don't think I will regret it.

Cheers,
--
DM2B.

Steve_

I've never heard of anyone losing the investment per se, what seems to happen is either (a) you have trouble getting the money out of the investment because it's got to be sold to someone and/or (b) you don't get all of your money back, I remember with AmLife I think it was they got into a dispute and only returned $350,000 to each investor in whatever it was. It seems to be the real estate ones that are tricky so the advice would be to avoid them, but most EB-5 investments are real estate related.

Well there's no particular flaw in that idea other than the usual ones. Economy is a mess, you're signing up to run a business that might fail.

My personal view on fast food restaurants is that there are too many of them and a lot of them are going to go out of business. If you're paying $7.25 an hour and can only charge $1 or $2 for a sandwich, that's a marginal business. Loads of quizno's have gone under.

In Canada the prices charged are way higher than in the US, more than twice as much in Burger King and McDonald's is also a lot higher, and bear in mind the minimum wage in Alberta for example is only $9.90 (although they pay more than that). However I would eat food from a Canadian one, I made the serious error of buying a hamburger from McDonald's in the US the other day, it tasted of nothing, like recently boiled water in a sponge is the only comparison I can make.

Richaroo

Thanks again everyone - really useful bits and pieces coming through - and some things for me to think about -
looks like no easy choice - I need to do more research into the options out there.

One of the main reasons I thought about the franchise option was that a few of the deals offered to me were investing in restaurants (franchises) where the eb5 money was a loan into these structures. My though was then to go it alone and have the control regarding exit and return of capital etc (especially if a franchisor is there to provide support in the form of expertise etc)

Recently I have been told that you can get a E-2 visa, set up the business incrementally with a lower investment to start, and then convert into eb-5 with the larger investment and associated employment requirements as the business starts to be more successful.

Any thoughts on that??

regards

Cheers

Hotscot

If you want the highest risk of failing miserably and having your life devastated.

Open a restaurant.


(There is a certain amount of cynicism in that statement but just a wee bit. Clearly there are successful restaurants but it is extremely risky.)

Then you have franchises like McD, Chipotle, Subway...where the owner has to run three of them in parallel to be making a return of around 40K a year in total profit. While working 7 days a week and long hours.
And the risk factor...advertising by competitors, a bad review on yelp, demographic shifts, slight variations in the local economy, for example a local company shuts its doors and 90% of your business disappears overnight.
And this applies to high end restaurants also, even those that started small 50 years ago and built their reputation over time, they can go bust just as easily.

If you are eager for the hard work and the high risk of financial wipeout....
In addition...it's simply a bad time to start a business here with the economy being a mess.

It's a gamble.

Steve_

You can do that but then you can run into trouble proving that you've created ten new jobs - when where they created, when you were on E-2 or after the I-526 was approved? Simpler just to do EB-5 if you can.